International Monetary Fund (IMF) Managing Director Kristalina Georgieva on Thursday emphasised the necessity of regulating cryptocurrencies due to their potential impact on financial stability. Speaking at a conference in Seoul focused on digital currencies, Georgieva expressed concerns about the macro-financial stability risks associated with the widespread adoption of crypto assets.
As reported by Reuters, during her opening speech at the joint conference with the South Korean government and central bank, Georgieva highlighted the challenge of crypto asset adoption undermining macro-financial stability. She pointed out that the adoption of cryptocurrencies could affect various aspects, including the effectiveness of monetary policy transmission, the management of capital flows, and fiscal sustainability, particularly in relation to volatile tax collection.
Georgieva stated that the IMF’s objective is to create a more efficient, interoperable, and accessible financial system by establishing regulations to mitigate the risks associated with cryptocurrencies and developing infrastructure by leveraging some of their technologies.
“It is not our intention to revert to a pre-crypto world or stifle innovation. Instead, well-crafted rules can foster and guide innovation,” Georgieva asserted.
In a panel discussion on the development of digital money, Georgieva emphasised that policymakers have the choice to actively participate in the process, contributing to its improvement, or risk being excluded. She highlighted the “tremendous interest” in learning from each other, with a particular emphasis on gaining insights from emerging markets. India was specifically mentioned for its digital public infrastructure, which has garnered notable attention.
Georgieva acknowledged the value of advanced economies’ experiences in the history of money, considering it as a valuable resource for understanding the evolving landscape of digital currencies.
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